Also, if non-cash contributions keep mounting, the rules should change so donors’ tax deductions equal the amount available for giving, Colinvaux said.
Now, a donor contributing an asset appraised at $1 million gets an immediate $1 million write-off. When a DAF sells the asset, it may fetch $900,000 and after carrying costs and fees, leave $800,000 for the DAF.
Even with the money in DAFs exploding, total charitable donations remain around 2 percent of disposable income, so it may be too early to judge whether they provide a societal benefit equal to the donors’ tax breaks. What is clear: The business of supporting charitable giving has never been so profitable.
This article was provided by Bloomberg News.